State Dept. Doubles Down on Palestinian Aid

PA in financial crisis, reports show

July 13, 2012

Following revelations on Capitol Hill that Palestinian Authority President Mahmoud Abbas has been stashing millions of dollars in U.S. aid money in a secret bank account, the State Department reaffirmed its commitment to providing the PA with around $600 million in taxpayer money.

The PA is rumored to be in dire fiscal straits, with its government on the brink of bankruptcy. Abbas was in Saudi Arabia Friday to ask King Abdullah for money to cover the Palestinian government’s bills.

Asked by a reporter if "the Palestinians raised concerns regarding their financial aid crunch," a State Department spokesperson reaffirmed the U.S.’s commitment, but declined to comment on "the specifics of our private diplomatic discussions."

"We are in regular contact with the Palestinian Authority on this and a wide range of other issues of mutual concern. On the specific issue of financial assistance, we continue to support our direct budget assistance program with the Palestinian Authority, and we are also encouraging other partners to contribute," the spokesperson said. "As we have said, the United States believes that it is important to assist in building up Palestinian institutions to create the conditions for a sustainable peace, and that goal is furthered by ensuring the financial stability of the Palestinian Authority."

The administration’s statement of faith in the P.A. comes on the heels of a congressional investigation into Abbas’ allegedly corrupt governing practices.

Abbas, experts told lawmakers this week, has enriched himself during his seven years in office through secret land deals, and has helped his two sons earn millions of dollars through their stakes in companies that profit from U.S. assistance.

Additionally, Abbas’ sons—Yasser and Tareq—have used their government ties to secure plum contracts and special treatment for business partners, according to Jonathan Schanzer, vice president for research at the Foundation for Defense of Democracies. The testimony was presented during a hearing entitled "Corruption within the Palestinian Political Establishment.

One D.C.-based Jewish official expressed concern that the Obama administration is waging a back-room deal aimed at bailing out the PA.

"If the Obama administration is conducting secret negotiations to bail out the Palestinian Authority with U.S. taxpayer money in the midst of economic hardship here at home, the White House is in store for a rude awakening," the source told the Free Beacon.

Lawmakers and administration officials have warned Abbas in recent days that if he continues his bid to unilaterally establish an independent state of Palestine at the United Nations, he risks losing critical U.S. aid money.